The biggest lesson from Ray Dalio’s Principles book is that failure leads to learning which leads to success. Success is an evolutionary process that starts with trying something new, experiencing pain, and learning from it. This formula summarizes it best:
Pain + Reflection = Progress
He goes even further than this with a 5-Step Process for Success. The steps make a loop, which is show at the top of this post. You might recognize its similarities to Joseph Campbell’s “Hero’s Journey” because that book had a tremendous influence on Dalio. In fact, the first part of his book uses the steps of the Hero’s Journey to tell his story.
The steps are an evolutionary process that requires experiential learning (vs. book learning). It is a cycle of action and reflection.
Ray Dalio’s 5-Step Process for Success
Here are Ray Dalio’s five steps briefly summarized:
- Have clear goals.
- Identify problems.
- Diagnose problems and their root causes.
- Design a plan.
- Execute the plan.
Here is a simple template to use for planning purposes:
For example, what would this look like if I applied it to my goals as an author?
Last year my book, Praying the Angelus, was released but I’ve been disappointed by the number sales (Pain). So, let’s apply the five-step process to change that (Reflection).
- Goal: Sell through the first printing in the first year.
- Problems: Not many people from my audience purchased the book.
- Diagnosis: My platform is not directly focused the solution the book provides. I’m not known as the prayer guy.
- Design: Build a platform focused on prayer. Build relationships with people who are known as prayer experts.
- Doing: Build an email list. Email potential partnerships.
The reason I think I did not achieve success is that I did not execute on the plan very well. I did a lot of outreach when the book came out. I also orchestrated some marketing campaigns to build an email list around the Angelus. I even built a Facebook Messenger bot with 4,000 people focused on the prayer. It is step 5 where I have been stalled. I just haven’t dedicated the necessary time to follow-through with the plan. I’ve been dedicating my time and energy to other projects instead.
Going through this process, you start to easily see where you are at.
- Do you need to dedicate more time and energy to the execution of your plan?
- Did you come up with a bad plan?
- Did you diagnose the wrong root causes of the problems?
- Did you take the time to reflect on what your problems are?
- Did you ever set a goal for yourself?
Here is another version of this five-step evolutionary process: